Missouri’s Effort to Create Health Insurance Exchange Falls Short in First Attempt

Missouri State Rep. Chris Molendorp, the Raymore Republican who led an unsuccessful effort this past legislative session said he would try again in the fall to create a Missouri health-insurance exchange to comply with the federal health reform law commonly known to supporters as the Affordable Care Act. Foes call it Obamacare.

Kansas City’s largest health insurer, Blue Cross and Blue Shield, supports creation of the exchange and posted on its new kchealthcarereform.org website on May 23 that efforts were already under way to form an interim Senate committee to discuss the matter in anticipation of the coming session.

State Sen. Jane Cunningham, a Republican from the St. Louis suburb of Chesterfield, said Tuesday she was unaware of such a committee being formed but if one comes together, “they need to include some attorneys who believe in Proposition C and want to abide by it … or they will run into the same buzz saw they ran into last time.”

Cunningham was a lead sponsor of legislation that led to the Aug. 3, 2010, referendum in which Missourians voted nearly 3 to 1 to reject the reform law’s mandate that individuals who can afford health insurance must have it or pay a tax penalty.

She also led opposition on the Senate floor to House Bill 609 during the past legislative session

That was the Molendorp-sponsored bill that would have created an exchange.

The bill passed the House, 157-0, and then was endorsed by the Senate Insurance Committee, but Cunningham and her allies essentially had the bill tabled until the clock to run out on the session, which ended May 13.

Cunningham said she had three objections to Molendorp’s bill.

The first was, “when I read the bill, it conflicted with the statute the people put in place with Proposition C, which absolutely protected Missourians against the individual mandate as part of Obamacare,” Cunningham said.

“Number two, (HB) 609 was laced with authority given to the feds in how our health-insurance exchange worked. Every other line is ‘According to federal code such and such.’ It gives the secretary of HHS (Health and Human Services) tremendous authority over how our health-insurance exchange is conducted,” Cunningham said. “And three, we didn’t have to do it this year.”

Molendorp, who runs his family’s State Farm insurance agency, said the reform law requires states to have an operational health-insurance exchange by 2014, or the feds will do it for them.

“I’m from the party of practical,” Molendorp said. “I understand the nuts and bolts of building an insurance company, and you can’t do that in a week.”

He likened the planned health-insurance exchange to the travel website Travelocity.com. Customers could compare plans and rates and buy insurance online.

“An insurance company has to decide if it wants to be Southwest Airlines and not participate in this type of service, but go it alone,” Molendorp said. “I can’t tell you today if Coventry or Humana want to be part of a Missouri health-insurance exchange. But you have to have the groundwork in place to allow those carriers to decide whether to participate. We can’t, as some senators have said, throw something together at the last minute to comply.”

Molendorp said he thought he understood the position of Cunningham and other opponents of his bill, but respectfully disagreed.

“Sen. Cunningham’s position is that the passage of Proposition C makes this a moot point,” Molendorp said. “Missouri does not need to comply in any way with any part of the federal healthcare bill. She doesn’t believe there are any consequences. We are sovereign.

“As a member of the party of practical, I recognize that the court cases dealing with the (reform law) are based upon the mandate of the individual – under the Commerce Clause — and whether individual citizens have to be compelled to buy insurance.

“Those cases aren’t about state health-insurance exchanges. So as a practical public-policy matter, looking out for the taxpayers, I have to create an exchange that responds to those 20 pages of the federal health-care law. My bill didn’t involve state general tax revenue. My bill had a clause for nullification if the federal health-care bill is struck down, and my bill makes sure we don’t promulgate Medicaid as the standard benefit package for every single Missourian. … My bill built a firewall between those individuals who earn 125 percent of the federal poverty level … to allow them to purchase private health insurance through the exchange. I don’t want the feds to promulgate upon us the largest expansion of Medicaid in the history of Missouri. I have to allow that that could be what happens.”

Molendorp said he backed Prop C, both in the Legislature and as a private citizen.

But, he said, “I just don’t know how I can walk away from this new paradigm. As I stressed to Sen. Cunningham, my bill doesn’t compel anyone to purchase insurance. If you wanted to purchase it, you could. No one is forcing you.
“Health-insurance exchanges are a Heritage Foundation idea,” Molendorp said. “Newt Gingrich was taking about health-insurance exchanges when health-insurance exchanges weren’t cool. It has conservative, free-market principles, and I won’t cede the free-market, conservative argument about exchanges because they are fundamentally American. It’s like a farmers market or a livestock exchange. Right now, somebody is logging onto Travelocity and Expedia.”

Cunningham said supporters of HB 609 tried to make some adjustments after they ran into Senate opposition, but that time ran out.